Providers of social networking applications, telecom providers, carriers and ISPs are bracing for the expected announcement this Thursday of new net neutrality rules by the Federal Communications Commission.
The impending release has launched last-minute lobbying from all quarters, from so-called 'Blue Dog' Democrats on behalf of carriers and cable companies, to CEOs of such companies as Google and Twitter that are eager to see the proposals adopted. Most parties to the debate already have made it known how they hope to see the FCC define and enforce the issue.
The one exception may be online marketers, which conceivably have a stake in all sides of the fight.
FCC Chairman Julius Genachowski gave the industry a broad-brush sneak preview of the rules last month: namely, they will focus on preventing ISPs from discriminating against particular internet content or applications, and ensuring they are transparent about their network management practices.
These are hardly new theories; net neutrality has been a hotly debated issue among ISPs, telecom carriers and providers of social networking applications for years. Still, that did not stop 72 House Democrats from urging the FCC Monday - in a letter to Genachowski - to " carefully consider the full range of potential consequences that government action may have on network investment."
Genachowski received another letter as well, this one signed by executives from Google, Twitter, Facebook, Flick, IAC, Cbeyond, Craigslist, Digg, Skype and TiVo, among other firms, urging him to move forward with the rules.
It's All About Control
While there are nuances to the issue - one only has to look at the back and forth sniping between AT&T and Google over the Google Voice application to see that the main issue at stake is about control of access to certain content. ISPs and carriers maintain they should be able to control traffic for network management purposes; content sites such as Google accuse these carriers of using the network-management to divert or suppress traffic to certain sites, especially ones that offer competing services.
Online Marketers Have Stake
Online marketers have a vested interest in making sure each faction's needs are recognized. Sites such as Google, Twitter, Facebook, etc. are staples to many campaigns, and having access blocked or slowed to these sites would clearly hinder marketing effectiveness.
On the other hand, carriers' ability to manage networks is proving an increasingly complex task, thanks in no small part to the huge volumes of content. New wireless-industry forecast data from Coda Research Consultancy suggests that mobile broadband search and display ad revenues in the US will grow to $2 billion in 2015, up from $1 billion in 2010. Users accessing video via mobile phones are expected to total 74 million in 2015, generating $530 million in subscriptions, and $420 million in advertising.
Yet this is not necessarily good news for carriers, according to Steve Smith, founder of Coda. "The amount of data generated by mobile broadband users is already significantly impacting carriers, and it will get worse," he said. "Our view is that the debate around net neutrality simply doesn't apply to mobile broadband. With the top 3% of smartphone users consuming 40% of mobile bandwidth in the US, network access clearly needs to be managed so that other customers' usage is not impacted."
Internet Economics Shifting
A new report by Arbor Networks, the University of Michigan and Merit Network, though, suggests that the fundamental economics of the internet are shifting - which could well have an even greater impact on these trends than any new regulation.
The Arbor Networks' 2009 Internet Observatory Report found an ongoing decline in the price of data transit, from $120/Mbps in 2003 to $12/Mbps to an estimated $1.20/Mbps in 2014.
This trend, in conjunction with rising internet advertising revenue, has transformed the relationship among transit providers, consumer networks and content providers, the report concluded.
Where once network providers - such as AT&T - might have charged content networks for data transit, they're moving toward "settlement free connectivity" or even paying content networks because content is so much more valuable than commodity bit transit.
"One of the net neutrality arguments is the net is a utility, and this very much highlights that it's not," said Danny McPherson, VP and CSO of Arbor Networks.
